UK Minister Sees Progress in Dubai World Debt Talks

“I think there are signs of some progress being made from what I hear from the banks and therefore I am hopeful that this progress can continue,” Davies said during a visit to Dubai.

Royal Bank of Scotland Group Plc, HSBC Holdings Plc, Lloyds Banking Group Plc and Standard Chartered are among Dubai World’s creditors.

Dubai World’s debt restructuring has tested UK banks’ resolve in the short-term, he told reporters before meeting officials.

Davies trip to the UAE comes nearly a month after the visit of British Business Secretary Peter Mandelson, who also called for a smooth settlement of the debt issues.

Dubai World is currently in talks with its 97 lenders on restructuring the $26 billion debt. While a final proposal is expected in the coming days or weeks, banking sources said they are optimistic that lenders to Dubai World would get a range of options including full repayment.

On Tuesday, Shaikh Hamdan bin Rashid Al Maktoum, UAE Finance Minister and Deputy Ruler of Dubai, said the country stood by Dubai and a debt deal was imminent. Minister of Economy Sultan bin Saeed Al Mansouri echoed Shaikh Hamdan’s optimism and said he was confident that Dubai World would reach an accord with creditors at the earliest.

Ahead of his UAE visit Lord Davies said the Emirates remained “a hugely important market to the UK as our number one trading partner in the Middle East with ambitious diversification and investment plans”.

The size and scope of the delegation accompanying him indicated the UK’s enthusiasm to explore new business opportunities.

“At the end of last year, the UK and UAE governments made a commitment to increasing our bilateral trade to £12 billion by 2015, a 60 per cent increase from current levels. I hope this visit moves us a step closer to achieving our new trade targets.”

Lord Davies was scheduled to visit DP World, the company behind the £1.5 billion London Gateway port project that will generate 36,000 jobs in the UK and when completed will be the size of two Cities of London.

On Wednesday, in Abu Dhabi, he was given a reception by Mohammed Ahmed bin Abdul Aziz Al Shihhi, director general of the UAE Ministry of Economy.

Al Shihhi stressed the importance of adequate follow up through official meetings and business delegations to achieve the objectives of the UAE-UK joint economic committee meeting held in London recently.

issacjohn@khaleejtimes.com